HomeMy WebLinkAbout12/03/2009 AGENDA BACKUPCentral Contra Costa Sanitary District
' BOARD OF DIRECTORS
POSITION PAPER
Board Meeting Date: December 3, 2009 No.:.' 4..d. Consent Calendar
Type of Action: APPROVE FINANCIAL REPORT
subject: APPROVE THE COMPREHENSIVE ANNUAL FINANCIAL REPORT AS OF
JUNE 30, 2009 FOR SUBMISSION TO THE GOVERNMENT FINANCE OFFICERS
ASSOCIATION.
Submitted By: Initiating Dept /Div.:
Debbie Ratcliff, Controller Finance & Accounting
REVIEWED AND RECOMMENDED FOR BOARD ACTION:
D. Ratcliff ' Y fur R. Musgr es James W. Kelly,
1
General Manager
ISSUE: Board approval is requested to submit a Comprehensive Annual Financial
Report (CAFR) to the Government Finance Officers Association of United States and
Canada (GFOA) for review.
RECOMMENDATION: Review and approve the June 30, 2009 CAFR for GFOA
submission.
FINANCIAL IMPACTS: There is an application fee for submission of a CAFR for
review based on total revenues of the entity applying. The District fee is $505 based on
this sliding fee schedule.
ALTERNATIVES /CONSIDERATIONS: None for the current year.
BACKGROUND: The GFOA is a professional association of state /provincial and local
finance officers in the United States and Canada, and has served the public finance
profession since 1906. The association's members are dedicated to the sound
management of government financial resources and the GFOA provides input to the
Governmental Accounting Standards Board (GASB). The GFOA sponsors the
Certificate of Achievement for Excellence in Financial Reporting Program.
The Finance and Accounting Division has prepared the District's CAFR as of June 30,
2009. The District was awarded a Certificate of Achievement for Excellence in
Financial Reporting by the GFOA for reports submitted for the 2000 -2008 fiscal years.
The Certificate of Achievement is the highest form of recognition for excellence in state
and local government financial reporting. In order to be awarded a Certificate of
Achievement, a government must publish an easily readable and efficiently organized
comprehensive annual financial report. The CAFR includes ten years of historical
financial and statistical data. This report must satisfy both generally accepted
accounting principles and applicable legal requirements.
N:\ADMINSUP\ADMIN \POSPAPER \CAFR 12- 03- 09.doc Page 1 of 2
POSITION PAPER
Board Meeting Date: December 3, 2009
subject. APPROVE THE COMPREHENSIVE ANNUAL FINANCIAL REPORT AS OF
JUNE 30, 2009 FOR SUBMISSION TO THE GOVERNMENT FINANCE OFFICERS
ASSOCIATION.
A Certificate of Achievement is valid for a period of one year only. We believe our
current comprehensive financial report continues to meet the Certificate of Achievement
Program's requirements and we are asking approval to submit it to the GFOA to
determine its eligibility for another certificate.
The Board Finance Committee reviewed a draft of the June 30, 2009 CAFR on
November 16, 2009 and had no recommended changes.
RECOMMENDED BOARD ACTION: Approve the CAFR for submission to the GFOA.
N:\ADMINSMADMIN \POSPAPER\CAFR 12- 03- 09.doc Page 2 of 2
Central Contra Costa Sanitary District
' BOARD OF DIRECTORS
x: POSITION PAPER
Board Meeting Date: December 3, 2009 No.: 4.e. Consent Calendar
Type of Action: CONFIRM PUBLICATION
Subject: ADOPT A RESOLUTION CONFIRMING PUBLICATION OF A SUMMARY OF
DISTRICT ORDINANCE NO. 257 (UNCODIFIED) - ESTABLISHING REIMBURSEMENT
FEES FOR THE PROPERTIES WHICH COULD DIRECTLY OR INDIRECTLY
CONNECT TO DISTRICT PROJECT 5919 (ALHAMBRA VALLEY TRUNK SEWER
AVAD 2007 -1); AND DIRECTLY CONNECT TO JOB 6412 (MONTEIRA AVAD 2007 -4);
6439 (RELIEZ VALLEY AVAD 2007 -3); 6441 (QUAIL AVAD 2007 -6); AND 6442
(GORDON /MILLTHWAIT AVAD 2007 -2) IN ALHAMBRA VALLEY
Submitted By: Initiating DeptlDiv.: Administrative Department
Elaine R. Boehme
Secretary of the District
REVIEWED AND RECOMMENDED FOR BOARD ACTION:
E. Boehme
a�s M, elly,
General Manager
ISSUE: Section 6490 of the Health and Safety Code of the State of California provides
that District ordinances shall be published once in a newspaper of general circulation
within the District, and provides that an Order of the Board of Directors of the District to
the effect that the ordinance has been published shall constitute conclusive evidence
that publication has been properly made.
RECOMMENDATION: Adopt a resolution confirming the publication of a summary of
District Ordinance No. 257.
FINANCIAL IMPACTS: None.
ALTERNATIVES /CONSIDERATIONS: Establishes presumption that the ordinance
was correctly published and therefore would be deemed procedurally valid by a court.
BACKGROUND: A summary of District Ordinance No. 257 (Uncodified) which was
adopted by the Board at the meeting of October 15, 2009, and which establishes
reimbursement fees for the properties which could directly or indirectly connect to
District Project 5919 (Alhambra Valley Trunk Sewer AVAD 2007 -1); and directly
connect to Job 6412 (Monteira AVAD 2007 -4); 6439 (Reliez Valley AVAD 2007 -3);
6441 (Quail AVAD 2007 -6); and 6442 (Gordon /Millthwait AVAD 2007 -2) in Alhambra
Valley, was published in the Contra Costa Times and the Valley Times on October 25,
2009. Proof of publication is attached.
RECOMMENDED BOARD ACTION: Adopt a resolution confirming the publication of a
summary of District Ordinance No. 257.
Page 1 of 4
RESOLUTION NO. 2009-
RESOLUTION CONFIRMING PUBLICATION OF
A SUMMARY OF DISTRICT ORDINANCE NO. 257 (UNCODIFIED)
ESTABLISHING REIMBURSEMENT FEES FOR THE PROPERTIES WHICH COULD
DIRECTLY OR INDIRECTLY CONNECT TO DISTRICT PROJECT 5919 (ALHAMBRA
VALLEY TRUNK SEWER AVAD 2007 -1); AND DIRECTLY CONNECT TO JOB 6412
(MONTEIRA AVAD 2007 -4); 6439 (RELIEZ VALLEY AVAD 2007 -3); 6441 (QUAIL AVAD
2007 -6); AND 6442 (GORDON /MILLTHWAIT AVAD 2007 -2)
IN ALHAMBRA VALLEY
WHEREAS, Section 6490 of the Health and Safety Code of the State of California
provides that District ordinances shall be published once in a newspaper of general
circulation within the District, and provides that an Order of the Board of Directors of the
District to the effect that the Ordinance has been published shall constitute conclusive
evidence that publication has been properly made.
NOW, THEREFORE, be it resolved by the Board of Directors of the Central Contra
Costa Sanitary District as follows:
THAT a summary of District Ordinance No. 257 (Uncodified) which was adopted
on October 15, 2009, and which Establishes Reimbursement Fees for the Properties
Which Could Directly or Indirectly Connect to District Project 5919 (Alhambra Valley
Trunk Sewer AVAD 2007 -1); and Directly Connect to Job 6412 (Monteira AVAD 2007 -4);
6439 (Reliez Valley AVAD 2007 -3); 6441 (Quail AVAD 2007 -6); and 6442
(Gordon /Millthwait AVAD 2007 -2) in Alhambra Valley, has been properly published once
since its adoption in the Contra Costa Times and the Valley Times, newspapers of
general circulation within Contra Costa County.
PASSED AND ADOPTED by the Central Contra Costa Sanitary District Board of
Directors this 3`d day of December, 2009 by the following vote:
AYES:
Members:
NOES:
Members:
ABSENT:
Members:
COUNTERSIGNED:
Elaine R. Boehme
Secretary of the Central Contra Costa
Sanitary District, County of Contra
Costa, State of California
Approved as to Form:
James A. Nejedly
President of the Board of Directors,
Central Contra Costa Sanitary District,
County of Contra Costa, State of California
Kenton L. Alm
District Counsel
Contra Costa Times
Legal " °.
SUOF
�.
ORDINANCE ANCE N N0.257
P 0 BOX 4147
AN ORDINANCE
Walnut Creek, CA 94596
TTO TO
(uN ESTABLISH
(925) 935 -2525
REIAPPLICABL TO
- -
PROPERTIES THAT
CONNECT TO SANITARY
SEWER FACILITIES IN
-
ALHAMBRA VALLEY:
- DISTRICT PROJECT 5919
- Central CC Sanitary
TAR NK SBRA VALLEY AVAD
Ann /Accts Payable,5019 hTlhoff Pl.
2007-1); AND JOBS 6112
Martinez CA 945534316
(MONTEIRA AVAD 2007 -
4); 6439(RELIEZ VALLEY
AVAD 2007 -3); 6141
-
(QUAIL AVAD 2007.6);
AND 6442
PROOF OF PUBLICATION
(GORDAVAD 20007 HWAR
-
Ordinance No. 257
FILE NO. Summary Of Ordlnan
(Uncodlfied) establishes
Reimbursement Fees of
$21,179 per parcel for di.
-
rect connections to DIs-
In the matter of
trlct Project 5919 (Al-
hambra Valley Trunk
Sewer); $7,369 per par-
cel for indirect connec-
tionsto District Project
5919; $13,692 per parcel
for connections to Job
6412 (Montelra AVAD
I am a citizen of the United States and a resident of the County
foco per par-
cel r ect s
aforesaid; I am over the age of eighteen.years, and not a party to or
Job .6439 (Reliez Valley
interested in the above- entitled matter.
AVAD 2007 -3); $33,432
per parcel (with access
to Quail Lane) for con-
nections to Job 6441
1 am the Principal Legal Clerk of the Contra Costa Times, a
p 9
(Quail AVAD 2007.6);
$2 &492 per parcel (with -
newspaper of general circulation, printed and published at 2640
out access to Quail
Shadelands Drive in the City of Walnut Creek, County of Contra
ob e) 6441 connections AVAD
Costa, 94598
2arcel)'ford $11,470 cttions
-
(Gordon /Millthwalt
And which newspaper has been adjudged a newspaper of general
AVAD 2007 -2) in accord -
accord-
circulation b the Superior Court of the Count of Contra Costa,
y p y
ance with District Code
Chapter 6.20 t Reim -
State California, under the date of October 22, 1934. Case
bursement Fees." The
of
reimbursement fees set
Number 19764.
forth by this ordinance
shall be administered,
adjusted, and collected
The notice, of which the annexed is a printed copy (set in type not
according to the provi-
small than nonpareil), has been published in each regular and entire
sions of said Chapter.
issue of said newspaper and not in any supplement thereof on the
uomma.7 of above hign
following dates, to -wit:
o9d nl aneet A pro
10/2512009
the entire ordinance
-
may be necessary to ob-
tain a full understanding
of the fee proposed. A
- -
certified copy of the full
text of the proposed or-
dinance is posted and
may be read in the Sec-
.
retary of the District's
Office at 5019 Imhoff
-
Place, Martinez and /or a
copy may be obtained
from the office.
Adopted:
October 15, 2009
AYES:Members:Hockett,
-
LuceyyMcGill, Menesini,
Neledly
NOES:Members:None
ABSENT:Members:None
-
/s/ James A. Neledly
President of the District
Board of the
Central Contra Costa
'
Sanitary District,
County of Contra Costa,
State of California
- -
COUNTERSIGNED:
I certify (or declare) under the penalty of perjury
/s/ Elaine R. Boehme
that the foregoing is true and correct.
Secretary of the Central
Contra Costa
Sanitary District, County
Executed at Walnut Creek, California.
of contra
Costa, State of Califor-
On this 26 day of October, 2009
nia
Approved as to Form:
/s/ Kenton L Alm
Kenton L Alm
District Counsel
Signature
CCTJJ3295481
OCL 25, 2009
0003295481
The Valley Times
( Indorporating The Pleasanton Times)
P.O. Box 607
Pleasanton, California 94566
Central CC Sanitary
Arm/Accts Payable,5019 Imhoff Pl.
Martinez CA 94553 -4316
AFFIDAVIT OF PUBLICATION
FILE NO. ORD. 257
In the matter of
The undersigned declares and says:
That he is and was during all the times herein mentioned a citizen
of the United States, over the age of 21 years, and neither party to
nor in any way interested in the matter.of action herein set forth, and
is and was competent to be witness in said matter of action.
That he is now and was at all times mentioned the Publisher /Legal
Clerk/Legal Coordinator of THE VALLEY TIMES, incorporating the
Pleasanton Times and is now, and was all the times therein
mentioned a newspaper of general circulation printed and published
in the City of Pleasanton, Township of Pleasanton, County of
Alameda, State of California, and as.such has now at at all times
had charge of all legal notices and advertisements in said
newspaper; and that said THE VALLEY TIMES, incorporating The
Pleasanton Times is now and was at all times herein mentioned a
newspaper of general circulation as that term is defined by Section
6040.5 of the Government code, and as provided by said Section is
published class, profession, trade, calling, race or denomination, or
for any number of such classes, professions, trades, calling races,
or denominations; that all of said times said newspaper has been
established, printed, and published at regular intervals for
dissemination of local and telegraphic news and intelligence of
general character, having a bonafide subscription list of paying
subscribers, and is not devoted to the interests or published for the
entertainment or instruction of a particular in said township, county,
and state, for more than a year preceding the date of the first
publication of the notice mentioned; the said notice was set in type
not smaller than nonpariel, and was preceded with words in
blackface type not smaller than nonpariel, describing or expressing
in general terms the purport and character of the notice intended to
be given.
That the Legal Notice .a copy of which is attached hereto, was
published in said newspaper, The Valley Times (incorporating The
Pleasanton Times) on the
10/25/2009
I certify (or declare) under the penalty of perjury
that the foregoing is true and correct.
Executed at Walnut Creek, California.
On this 26 day of October, 20
Signature
Legal No.
SUMMARY OF
ORDINANCE NO. 257
AN ORDINANCE
(UNCODIFIED) TO
ESTABLISH
REIMBURSEMENT FEES
APPUCA13LE TO
PROPERTIES THAT
CONNECT TO SANITARY
SEWER FACILITIES IN
ALHAMBRA VALLEY:
DISTRICT PROJECT 5919
( ALHAMBRA VALLEY
TRUNK SEWER AVAD
2007.1); AND
J AVAD 2007-4} 6439
(RELIFZ VALLEY AVAD
2007 -3); 6441 (QUAIL
AVAD 2007.0; AND 6442
(GORDONND �
ILLTHW
li,zl,lva per parcel ror or
rect connections to Dis-
trict Project 5919 (Al-
hambra Valley Trunk
Sewer); $7,369 per par-
cel for indirect connec-
tions to District Project
5919; $13,692 per parcel
for connections to Job
6412 (Monteira AVAD
2007 -4); 522,126 per par-
cel for connections to
Job 6439 (Rellez Valley
AVAD 2007 -3); $33,432
per parcel (with access
to Quail Lane) for con-
nections to Job 6441
(Quail AVAD 2007.6);
$28,492 per parcel (with-
out access to Quail
Lane) for connections to
Job 6441 (Quail AVAD
2007 -6); and $11,470 per
VVarcel for connections
to Job 6442
(Gordon /Millthwait
NOTE: The
summary of r
lights of the
ordinance. A
the entire
to
text or the proposes or-
dinance is posted and
may be read in the Sec-
retary of the District's
Office at 5019 Imhoff
Place, Martinez and /or a
copy may be obtained
from the office.
Adopted:
October 15, 2009
AYFS:Members: Hockett,
Wcey, McGill, Menesini,
Nejedly
NOES:Members:None
ABSENT:Members:None
/s/ James A. Nejedly
President of the District
Board of the
Central Contra Costa
Sanitary District,
County of Contra Costa,
State of California
COUNTERSIGNED:
/s/ Elaine R. Boehme
Secretary of the Central
Contra Costa
San" District, County
of Contra Costa, State of
California
Approved as to Form:
/s/ Kenton L Alm
Kenton L Alm
District Counsel
SRVT #3295784
October 25, 2009
0003295784
Central Contra Costa Sanitary District
' BOARD OF DIRECTORS
POSITION PAPER
Board Meeting Date: December 3, 2009 No.: 4.f. Consent Calendar
Type of Action: HUMAN RESOURCES
Subject: ADOPT AMENDMENT TO MEMORANDUM OF UNDERSTANDING WITH
THE EMPLOYEES' ASSOCIATION, PUBLIC EMPLOYEES' UNION, LOCAL ONE
Submitted By: Cathryn Freitas, Human InitiatingDept.lDiv.: Administration /Human
Resources Manager Resources
REVIEWED AND RECOMMENDED FOR BOARD ACTION:
C. Freitas ry t. R. Mus ayes
ames M. elly,
General onager
ISSUE: In Closed Session at the November 19, 2009 meeting, the Board directed staff
to prepare an amendment to the Memorandum of Understanding (MOU) between the
District and the Employees' Association, Public Employees' Union, Local One regarding
Tier III dental benefits.
RECOMMENDATION: Adopt the amendment.
FINANCIAL IMPACTS: None for the foreseeable future.
ALTERNATIVES /CONSIDERATIONS: Direct staff to return to the negotiating table.
BACKGROUND: Local One has proposed that the attached language regarding Tier III
dental benefits be included in the MOU, effective July 2, 2009 -April 17, 2012. The
Board directed staff to place the language for Board consideration on the December 3,
2009 agenda.
RECOMMENDED BOARD ACTION: Adopt the amendment.
C1Documents and Settings \cfreitas\My Documents \local one mou dental tier iii pos ppr 11- 23- 09.doc
PROPOSED TIER III DENTAL LANGUAGE TO BE ADDED TO THE MOU BETWEEN
THE DISTRICT AND LOCAL ONE, ARTICLE IV, SECTION 1.10, CONTINUANCE OF
BENEFITS
"Tier lll: Employees hired after June 30, 2009 shall be covered by medical
and dental plans when they retire from District employment provided that
they meet the "Rule of 70." Under the "Rule of 70," an employee's age
plus years of service with the District at the time of retirement must total
70, with a minimum requirement that the employee must be at least age
55 and have at least ten (10) years of service with the District at the time
of retirement. The District shall only pay fifty (509,o') percent of the
premium cost for the lowest cost medical plan for the retiree and spouse,
and one - hundred (100 %) percent of the premium cost for dental for the
retiree and spouse until the employee's 65th birthday. At age 65, the
retired employee shall pay the District fifty percent (509,o) of the cost to the
District for the retired employee's dental coverage. Eligible employees'
qualified dependents (as defined by the plan provider) other than the
employee's spouse or domestic partner who were covered as dependents
at the time of retirement also shall be covered by medical and dental plans
with the exception that the employee shall pay the full cost of medical
coverage for those dependents and the District shall only pay the full cost
of dental. At age 65, eligible dependents (spouse or domestic partner)
shall pay the District fifty percent (50916) of the cost to the District for dental
coverage. Tier/// retirees and dependents are ineligible for life insurance."
Central Contra Costa Sanitary District
' BOARD OF DIRECTORS
Rnlm POSITION PAPER
Board Meeting Date: December 3, 2009 No.: 4.g. Consent Calendar
Type of Action: HUMAN RESOURCES
subject: AUTHORIZE AN EXTENDED LEAVE OF ABSENCE WITHOUT PAY FOR
ENGINEERING ASSISTANT II ERIKA LISKAMM .THROUGH MARCH 5, 2010
Submitted By: Initiating Dept. /Div.:
Kurt Darner, Engineering / Environmental Services
Development Services Supervisor
RE IEWED AND RECOMMENDED FOR BOARD ACTION:
K. Darner t. Swanson A. Farrell C. Freitas James .Kelly,
ISSUE: Board of Directors' authorization is required for a leave of absence without pay
in excess of 30 days.
RECOMMENDATION: Authorize leave of absence without pay for Engineering
Assistant II Erika Liskamm.
FINANCIAL IMPACTS: Minimal.
ALTERNATIVES /CONSIDERATIONS: Deny leave of absence without pay.
BACKGROUND: Engineering Assistant II Erika Liskamm had been periodically off of
work since December 2008, due to a medical condition. This time off resulted in the
use of all of Ms. Liskamm's leave. As a result, Ms. Liskamm requested and was
granted a 30 -day leave of absence without pay which ended on August 19, 2009. Ms.
Liskamm's medical condition did not improve to a point where she could return to work.
Consequently, the Board granted an extension of leave of absence without pay through
December 3, 2009. Ms. Liskamm's medical condition still has not improved, and as a
result, it is requested that Ms. Liskamm be granted a subsequent extension of leave of
absence without pay through March 5, 2010. Ms. Liskamm's status will continue to be
reviewed, and further Board action may be requested if appropriate.
RECOMMENDED BOARD ACTION: Authorize medical leave of absence without pay
for Engineering Assistant II Erika Liskamm through March 5, 2010.
i\ N: \ENVRSEC \Position Papers \Darner\2009 \Liskamm Authorize Leave of Absence Final 12- 3- 09.DOC
' Central Contra Costa Sanitary District
BOARD OF DIRECTORS
POSITION PAPER
Board Meeting Date: December 3, 2009 No.: 4.h. Consent Calendar
Type of Action: APPROVE CELLULAR PHONE PROGRAM
Subject: APPROVE A CELLULAR PHONE PROGRAM BETWEEN THE DISTRICT AND
THE MANAGEMENT GROUP PURSUANT TO THE MEMORANDUM OF
UNDERSTANDING EFFECTIVE JUNE 18, 2009
Submitted By: Initiating Dept. /Div.:
Elaine R. Boehme Secretary of the District
REVIEWED AND RECOMMENDED FOR BOARD ACTION:
E. Boehme
ISSUE: Board representatives and representatives of the Management Group have
agreed to a Cellular Phone Program. Pursuant to the Memorandum of Understanding
(MOU) approved June 18, 2009, the Board of Directors must approve this program.
RECOMMENDATION: Approve Cell Phone Program for Management Group.
FINANCIAL IMPACTS: The additional cost of the proposed program is estimated to be
approximately $3,000 per year.
ALTERNATIVES /CONSIDERATIONS: Continue with the existing cell phone program.
BACKGROUND: Managers currently receive up to $50 per month reimbursement for
use of their personal cell phones for District business. During the 2009 labor
negotiations, the Management Group requested that the District reimburse the Manager
for half the purchase price of a smart phone (e.g. Blackberry, I- Phone, Treo), and $100
per month for the service.
The Human Resources Committee and Board discussed this request during the
negotiations and several questions arose, including whether the District should
purchase and own the phones, or whether staff should purchase their own. Also, the
tax implications of both needed to be reviewed. In order not to delay approval of the
Management MOU, the Board directed the General Manager to address the request
and come back to the Board for ratification of his recommendation.
Management Group representatives met with the Board representatives to develop a
cell phone program to include smart phones that would benefit the District by providing
better communication and access to information. Under the proposed program,
N: \ENVRSEC \Position Papers \Swanson\2009 \PP Management Group Cell Phone Program Page 1 of 2
POSITION PAPER
Board Meeting Date: December 3, 2009
Subject: APPROVE A CELLULAR PHONE PROGRAM BETWEEN THE DISTRICT
AND THE MANAGEMENT GROUP PURSUANT TO THE MEMORANDUM OF
UNDERSTANDING EFFECTIVE JUNE 18, 2009
Management employees could select one of the following two options:
1. Continue with the current cell phone plan.
2. Upgrade their cellular phone equipment and service to a smart phone that is
compatible with the District information systems and has e-mail and internet
capabilities.
Under the proposed upgrade, Management employees would be reimbursed for one
half the cost of the smart phone, up to $150. Employees would not be reimbursed for
smart phone purchases more frequently than every two years. Management
employees would be reimbursed up to $100 per month for the monthly smart phone
service. Management employees would also be required to comply with applicable
rules and procedures related to cell phone use and accessibility developed by the
District.
If approved by the Board, the program would be effective as of June 18, 2009; the date
the Management MOU was approved by the Board. Reimbursement of monthly smart
phone service fees would be effective as of December 1, 2009.
RECOMMENDED BOARD ACTION: Approve Cell Phone Program for Management
Group.
NAENVRSEC \Position Papers \Swanson\2009 \PP Management Group Cell Phone Program Page 2 of 2
O
(n
O
(D
N
D
Q
n
O
3
O
2
c
00
aj
aj
7o
.c
w
N
CD
a)
No
O70
O
o
%.O
C
cli
r--t-
CD
CD
R
O z
0 0 0 0 0 7C3
CD
O
o- D
07 0
ai 3 rt o
Lo g LO
o CD��'
Ul V) °— rD -7 3 p
n
o r* �, r� -0' CD
o �' <
°' Cp cn O D CD
3 < D
rn
D
A AP �01
D
n
CD
(D<
Q
°°_
0)
z
�
*�
3
ZT
�
rn
�.
o
Ln
�
a
c
o
Ln
n
L
vi
_0
CD
a
=t
n
n
ui
r
CD
CD
o
r)
-�
'
D
o
o
CO
r-r
M
CD
o
7-3
o
0-
oN
3
o
Q `fl
a)
m
ID
o
r*
LO
CD
o
c
N
0
0
Residential Participation
n �
O o
° (D 0 # of Participants
LO :3 n)
r--.r -• cn 0 -
O r O 0
n 0 Z O N W CT O J N CD
CU
( °o °o °o °o C) °o °o °o °o °o �
-6 N
0 -h 7D
N N 0 7D
Q 6 O o N Qj Qj
CD O o
Q C o r- Im T
W CD N
ry O n IV W O
O �D Wo �"r U) (f )
CD O o � O
O CD L
Ln 3 w �' ° CD O rt
rt N o CD lL -h E
N
U O
cli CD -IJ
= o N -n O
=
00 .p �1 O-<
oho \moo CD
°' CVD N o O 0
0) O
LO <• O O_ CO
� (D p N
4h- 00 o Q
L). 0) t'D 1D, iv 00 U)
CD CD o 0 0
- � O
O N N W W A A CSI
(T O (P O CT O U� O CJl O
0 0 0 0 0 0 0 0 0 0
% of Households
",Row .
�I
0
Cr n:
n m
O 7
3 m
3
m n
J
0
� J
a O
o J Z
w o D
o z
N N
N O
o N �
A �
o A D
0 o A
n CO
�G w 0
0 0
c N
J A �
A J 2
o A
CD N
0
? A G
W N n
e N
� � C
o w Z
o �
0
0
Residential Participation
Number of Participants
N W A Ui W J
O O
0 0 O O O
0 0 0 0
uoijediOi:wed %
V
( ^1
l J•
0
f1
�x
n r-r
0
N C
� x
nO
1
0
_J
OPP
q MOW Waste Management
Pounds
0
c
Q
O Ul O CA O O
O O O
h O O O O
O -co O O O O O
CD O O O O O O O CD
CD
-" O
4 o
O (A
N
C Q
w `D O
U)
00 T C
o V7
(D
n
Fow"O
p O
y
W C
O O
W - -
frt
'1'I
� O
_W O
W O
O to
4
Waste Management
Pounds
N W -P6 Ul O -4
O
O O O O O O
V
CD
CD CD CD CD CD CD
O
O O O O O O
O O
O O O O O O
T
O
16,144
p
0
C
Ln
�
-n
CD
zr
CD
CD
O
Q
(1
mn
aJ
c
64,540
`C
CD
4
o
3
mn
777�7
-0
o
445370
p�
co
0
co
00
to
I Sw Waste Management
CD
TI TI �l �l N
O O O O O
N 0) = co
O O O O O
CJ� C7 --1 00 CD
co O
o a) O C
CD IV (D
o - (D
CD `
p :
O r"f
o r C
O � C
( v,
CD o -� r-i-
o (D
O 1-4 o n O 13
N
°o (D
O O
O
V
O
O
O
W
O
O
V
O _
O
O
Operating Cost
�o
rD
_�
00
�
Q
Pounds of Reuse
m
(D
rD �.
cn
°
o
� o � o
lb,
o
°
�
O
�
��
co
o
0
m
Lo
c
a
�
o
0 0 -° -°
o
0
�,
�
CD
o
0 0 0 0
0
0
3
�rj
CD N
n
O
°a
rr
lQ
Ln
N \
CD
N
W
�
j
�
iD
Ln
N
o
w
O
?
o
$4039503
Ln
N
U,
Ln
LO v
(T
�
N
flJ
V
D
O. N
3
OD
hj
�
•
�-
0
d
t
O
o
W
�
�
, ^
L
N
LL
(D
v
�
(D
_n
O �G
;�
3
N
O
Q
Q
w
�
n
O
O
oo
O
m
6
fl1
--h
Q
(D
(D
L
n
�-
OD
°
M
°
CD
$335,553
W
°o
<�
ci
o
A
N
O
p�
O
D
D'
CD
LA
Ln
CD
�
�
W
CO
T
O
o
0
L
X•
O
O
cn N
O O Ui O
N
UP
W
O
\°
0
\°
o O O O
0 o c
O
o
O
0
Ie�.ol GISEM 10 }uOOJGd
°
�
O
�
$431,821
co
o
0
m
-' Temporary Event
Cars
,� 0 0 0 0 °o 0
�9 0 0 0 0 0 0 0
9
8
�
� �`9cP
�9
v cn 9
vii X99
3
M 0j 7O
—
� 10 y ? ri CU y 0 O V ,
♦ 00/OQ n (D
O
0 ;* 0�
`D rn
CD
CD < 00 < Qj
M ��s CD
1O
0
�O
� 8
06!
Qg O�
O)
Small Business
Program
� N W
.p u,
O O O
O O O O
O O
O O
mn
Un
O
N
3
hj
O
3
�
N
N
CD
O
o
-TI
-<
70
70
O
O
LO
O
�.
Qj
3
3
-n
V
O
W
CO
3
CO
3
Qj
m
CD
CO
O
All
CC
Operating Cost
Cost per Car
'
O
6
(D
a
Z)
V
C
O'
(D
O
.9h. Ul Ln M M --I
cn O V7 O Ul O
-I
Ul
CO
Cl
:3
Q
O
Z)
IN
O
Ln
Qj
Ln
�
((DD
�'
O
n
3
*
-D1,
Qj
En
6
C
�.
0
3
(D
Ln
T
-n
<
fi
cli
::�
G
l ^ J
�
O
CD-
-Z
0
0
n
'<
o
.
0
U1
0
p
flJ
rt
n
�
n
LO
o
C
r- Ln
-4
...t
�
a
�
n
0
rt
QCD
N
(D
3
p
Ln
U-)
0
(D
N
-
CD
00
N
Ql
O
V
O0
0)
00
OJ
LO
O
V
p
Q
O
MEN
Operating
Cost
■
❑
❑
■
■
l73 ^
�0 J
3. p
:3
s6�
<sgr
"0
n �
�° �'
aa�
2 C)
a� m
m �
�
q�a1
X
rDo
"(D
a
�.Qr-f
°
�o
r-F
CD
n�
°maO
rD :3 Qo fl1
��
�LO o(D
n0-
c
�
n `
..
�•
Qj a
�
N
(D
a
r)
F—+
O
f"f
•
(D
CD
W
W
0
-+�
n
a)
0
00
�
T
O
r)
77
-
CD
m
D
Qj
N
O
O
O
0
O
cr
VM
x
o(D
D
cn
CD
w
iPhl
ii
O
v
C/)
n
X
0
O
N
.-f
'O
O
y
CD
r
<
a
0
O
CO)
O
(1)
3
� CCD.
N
<
0
�
3
N
N
N
91)
CD
to
N
O
CD
Z
n
Q
F--i
3
O
�,o
a
w
co
w
�•
00
<
O
co
w
y
m
r
CD
M
N
LO
w
N
W
V
w
c
O
o
v
4
to
w
4
o
cD
%%now
V
00
a
NO
CD
V)
r- l
Item No. 6.a.2
Update on
Contractual Assessment
Districts
Curtis Swanson
December 3, 2009
CAD History
Y . CAD Program from 1997 to 2004
> Budget was $1,000,000 per year.
> Funded 23 CADs at cost of $3.63 million.
> Outstanding principal: $1.12 million.
> 2009 -10 payments: $307,000.
. AVADs since 2007 for the Alhambra
Valley
• Financed 6 AVADs at cost of $1.53 million.
• Annual payments: $156,000.
• Future AVADs will continue to be approved
individually by the Board.
� 1
a Recent CAD Events
• CCCSD discontinued CADs in 2003 -04.
• Since 2004, two neighborhoods sewered with
CCCSD facilitation.
• CCCSD could not form CADs (or AVADs)
after July 8, 2008.
• Citizen request for a CAD to Board on
June 18, 2009.
• Law to correct prohibition and allow CCCSD
to form CADs takes effect January 1, 2010.
Potential CAD Projects
■ Significant Interest
> Sunnybrook Road, Alamo ($150,000)
■ Lesser Interest
> Cordell /Harper Lane, Danville ($1,100,000)
> La Sonoma Way, Alamo ($150,000)
> Jackson Way, Alamo ($650,000)
> 6 other areas in Orinda, Lafayette & Walnut Creek
($2,000,000)
2
41
1
� CAD Policy Options
• Do not resume the CAD Program
• Homeowners responsible to finance sewer
extension.
• The process before 1997 & since 2004.
• Consider resuming the CAD Program
• What is impact on reserves and capital budget &
plan?
• What are the funding options?
Next Steps
■ Provide guidance to staff
• Do not resume CADs, or
• If the Board wants to consider CADs:
Ask staff to provide additional information
or investigate other options.
3
Central Contra Costa Sanitary District
December 3, 2009
TO: HONORABLE MEMBERS OF THE BOARD
FROM: JAMES M. KELLY, GENERAL MANAGER WK
SUBJECT: CONTRA COSTA COUNTY EMPLOYEES' RETIREMENT
ASSOCIATION TERMINAL COMPENSATION UPDATE
(AGENDA ITEM# 6.a.3)
The Contra Costa County Employees' Retirement Association ( CCCERA) Board of
Trustees announced a Special Board Meeting that will discuss the information and
recommendations presented in the Legal Opinion Letter.from CCCERA Fiduciary
Counsel to the Board of Retirement (attached). This letter concerns Final
Compensation and Retirement Benefits, specifically, which elements are considered in
"Final Compensation" calculations. As the information is of interest to many CCCERA
system members, all parties have been invited to attend.
In order to provide adequate seating, CCCERA is holding the meeting at the Concord
Hilton located at 1970 Diamond Boulevard in Concord. The agenda will be posted on
the CCCERA website in early January 2010.
The CCCERA Board of Retirement voted in October 2009 to take initial steps toward
"depooling ". (cost sharing) the risk associated with large employers that participate in-
CCCERA., ' In order to correctly attribute the unfunded liability for each employer,
CCCERA's actuary, the Segal Company is performing special studies to separate
CCCERA's experience and assets (AAL, UAAL and normal cost) by each employer
(with 50 or more employees) separately, commencing with the. December 31, 2002
valuation and going forward from that date. This study was tentatively scheduled for
presentation to the CCCERA Board on December 9, 2009. Due to the complexity of the
study, the actuarial presentation will not be completed by December. The study will be
presented at the January 13, 2010 CCCERA Board meeting.
District staff will attend both meetings and report back to the Board..
cc: Department Directors
Debbie Ratcliff
Colette Curtis -Brown
Elaine Boehme
Attachment
JMK:sIc
HAGeneral Manager's Directory\Board Documents\2009 \CCCERA Terminal Pay Update 6.a.3. Dec 3 2009.doc
ReedSmith
Harvey L. Leidennan
Direct Phone: +1415 659 5914
Email: HLeidermah @reedsmith.com
October 21, 2009
CONFIDENTIAI. AND PRIVILEGED
ATTORNFY- CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
Board of Retirement
Contra Costa County Employees' Retirement Assn.
1355 Willow Way, Suite 221
Concord, CA 94520
Final Compensation and Retirement Benefits
Dear Members of the Board:
Reed Smith LLP
101 Second Street
Suite 1800
San Francisco, CA 94105
+1 415 543 8700
Fax +1 415 391 8269
reedsmith.com
You have asked us to advise the Board as to current issues affecting the retirement system's
determination of the "final compensation" on which members' retirement benefits are calculated.
Following is a summary of the outstanding issues together with our legal analysis, conclusions and
recommendations for further Board consideration.
SUMMARY OF ISSUES
CCCERA has a statutory obligation to pay the proper amount of retirement benefits to each of its
members and beneficiaries, as provided by law. Indeed, it "cannot fulfill [its fiduciary] mandate unless
it investigates applications and,pays benefits only to those members who are eligible for them."
McIntyre v. Santa Barbara County Employees' Ret. Sys. (2001) 91 _Cal.AppAth 730, 734. In order to
discharge that obligation, it is the Board's responsibility to determine the proper elements that go into
calculating a member's benefit, as recognized by the laws governing the retirement system:. As those
laws evolve over time, the Board's policies must evolve with them.
A CCCERA member's service retirement allowance is based on four factors: (1) the statutory benefit
formula applicable to that member; (2) the member's age at retirement; (3) the member's years of
credited service; and (4) the member's "final compensation."
In order to properly determine a member's final compensation, the retirement system must clearly
specify the elements of remuneration that are and are not includable in the calculation. This requires
that the reporting system between CCCERA and each participating employer is sufficiently precise so as
to enable CCCERA to distinguish between items of remuneration that are and are not properly included
in a member's final compensation.
NEW YORK ♦ LONDON • HONG KONG ♦ CHICAGO • WASHINGTON, D.C. • BEIJING ♦ PARIS ♦ LOS ANGELES • SAN FRANCISCO • PHILADELPHIA • PITTSBURGH
OAKLAND • MUNICH • ABU DHABI ♦ PRINCETON • NORTHERN VIRGINIA • WILMINGTON • SILICON VALLEY • DUBAI • CENTURY CITY • RICHMOND • GREECE
Confidential and Privileged
Board of Retirement
October 21, 2009
Page 2
ReedSmith
CCCERA's current policies and definitions used in determining its members' retirement allowances
were last revised over a decade ago. Since that time, developments in the law and in public employee
compensation practices have evolved in important ways. In addition, recent public attention has been
focused on certain employer and employee practices that have led to unexpectedly inflated retirement
allowances being received by certain CCCERA members; the media has labeled this "pension spiking."
It is prudent at this time, then, to revisit CCCERA's policies and definitions and consider revising them
in order to assure that the system and its stakeholders continue to be aligned with applicable law.
This letter reviews the current rules for determining ,a member's "final compensation," addresses some
of the specific areas of concern that have been raised and makes recommendations for further Board
consideration.
LEGAL AND FACTUAL BACKGROUND
Determining A Member's Final Compensation Under CERL
In 1997, the California Supreme Court explained: "[T]here is a logical progression in the statutory
framework under which a [CERL] pension is calculated. Application of section 31460 is the first step,
since an item must meet its broad definition of `compensation' if it is also to fall within the narrower
category of `compensation earnable' defined in section 31461 and thus form the basis for the calculation
of `final compensation' on which the pension is based pursuant to section ... 31462.1." Ventura County
Deputy Sheriffs' Assn v. Bd. of Ret. (1997) 16 CalAth 483, 493 -94.
Thus, in order to determine a member's final compensation the retirement system must.go through the,
folfowing three step process:
STEP ONE: The system must determine which employment remuneration and advantages properly
constitute "compensation." Section 31460 provides: "`Compensation' means the remuneration paid in
cash out of county or district funds, plus any amount deducted from a member's wages for participation
in a deferred compensation plan ... but does not include the monetary value of board; lodging, fuel,
laundry, or other advantages furnished to a member."
• This definition filters out any item of value that was not paid in cash to the member.
STEP TWO: Once "compensation" is determined, the retirement system must determine how much of
that "compensation" qualifies as "compensation eamable." CERL Section 31461 provides:
"`Compensation eamable' by a member means the average compensation as determined by the board,
for the period under consideration upon the basis of the average number of days ordinarily worked by
persons in the same grade or class of positions during the period, and at the same rate of pay. ...
Compensation, as defined in Section 31460, that has been deferred shall be deemed `compensation
eamable' when earned, rather than when paid."
This definition has two primary impacts: (1) it filters out compensation for overtime world
because it is not based on the "average number of days ordinarily worked" by comparable
Confidential and Privileged
Board of Retirement ReedSmlth
October 21, 2009
Page 3
employees; and (2) it filters out compensation that was earned outside of the final compensation
period, even if it was paid during that period.
STEP THREE: The retirement system must determine how much of "compensation earnable" qualifies
as "final compensation." Section 31462.1 provides: "`Final compensation' means the average annual
compensation earnable by a member during any year elected by a member at or before the time he files
an application for retirement, or, if he fails to elect, during the year immediately preceding his
retirement."
This definition means that CCCERA must include in f nal compensation only the amounts of
"compensation earnable" that were paid,during the single, contiguous. 365 -day period chosen
by the member as his or her 'final compensation period (usually the last year of employment
when salary and benefits.are at their highest.)'
Distilling this three -step process, a general rule emerges:
To be included in final compensation an amount must be both (a) earned by the member and (b)
paid (or payable) to the member during the member's final compensation year, and it must not
represent overtime pay.
Case Law Interpreting CERL
In the Ventura case .cited above, the California Supreme, Court ruled that' CERL systems had, for many
years, been improperly excluding many pay items from members' final compensation. Such items
included payments in cash for bilingual premium pay, uniform maintenance allowance, educational
incentive pay, additional compensation for, meal periods, pay in lieu of annual leave accrual,
holiday pay, motorcycle. bonus, field training officer bonus and a longevity incentive.
After Ventura, two cases in the lower appellate courts addressed the question of whether accrued leave
that could be converted to cash only upon termination should be included in a member's final .
compensation. Both courts answered that question in the negative.
In the 2003 case, In re Retirement Cases (2003) 110 Cal.AppAth 426, the First District Court of Appeal
(which reviews appeals from the Contra Costa County Superior Court) explained: "Where an employee
cannot or does not elect to receive cash in lieu of the accrued time off prior to retirement, the benefit
remains one of time rather than cash. The right to a termination pay cash -out arises only upon
retirement...; the right does not arise prior to retirement or during service." The court went on to state:
"we hold that termination pay that is received upon retirement is not required under CERL to be
Some CCCERA members are subject to the three year final compensation period under section 31462, in which case
their "final compensation" is the average of each of those final three years. For ease of reference in this analysis, we will
refer to a one year final compensation period. The principles discussed herein also apply to a three year final compensation
period.
Confidential and Privileged
Board of Retirement
October 21, 2009
Page 4
ReedSmith
included in the calculation of pension benefits." Id. at 476. The court found this result clear under the
statute: "This language is not ambiguous; it plainly excludes [compensation paid only at] retirement and
we will not rewrite the statute." Id at 475.
A year later, the appellate court for the Fourth District Court of Appeal (San Diego) addressed the same
issue under CERL and ruled in the same way, explaining: "As In re Retirement Cases makes clear, a
public employer's decision to provide cash reimbursement for unused leave, after separation from
service, does not alter the noncash nature of the leave. Such one -time post - termination payments cannot
be considered part of final compensation without creating the risk of substantial distortion in the
retirement benefits otherwise payable to employees." Salus v. San Diego County Employees Retirement
Assn. (2004) 117 Cal.AppAth 734. "There is nothing in CERL which suggests the Legislature intended
pensions should vary so widely on the basis of accrued and unused leave, rather than on the basis of age;
years of service and salary.." Id. at 740.
Salus was consistent with the same appellate court's interpretation of the analogous law governing
Ca1PERS in Hudson v. Bd ofAdmin. (1997) 59 Cal.AppAth 1310, 1321, where the court ruled that
"[t]he exclusion of final settlement pay from compensation was intended to eliminate distortions caused.
by extraordinary increases just prior to retirement."
In addition to the exclusion of "final settlement" or "terminal" pay from final compensation, Salus also
noted that Hudson had excluded from final compensation payments made solely on condition that the
employee retire. In Hudson, a PERS - participating city had agreed to convert non -cash benefits to cash
salary in.certain managerial employees' final year. of employment to encourage them to retire. with a
higher benefit than they would have otherwise received. The - appellate court found that such
conversions should not be included in final compensation, to avoid the improper "spiking" of pension
benefits. See, Salus, 117 Cal.AppAth at 741.
History of Final Compensation Determinations by CCCERA
Following Ventura, in December; 1997, the CCCERA Board adopted a Policy called, "Determining
Which Pay Items are'Compensation' for Retirement Purpos es," in order to implement the court ruling.
The Policy itemizes the pay items that would and would not be included when determining a member's
final compensation. The Policy was amended a few weeks later. See Attachment A.
Meanwhile, after Ventura, litigation arose or was threatened in most CERL counties (including Contra
Costa) over (a) several additional pay items that were not specifically addressed in Ventura, and (b)
whether Ventura applied to members who had already retired before the ruling.. This is the litigation that
ultimately resulted in the In Re Retirement case discussed above; where the claims of active and retired
members and plan sponsors in CERL counties across the state were coordinated into a single proceeding
in San Francisco County Superior Court.
The litigation involving CCCERA, the County and CCCERA's participating districts resulted in a court-
approved settlement agreement in 1999 known as the Paulson settlement. The treatment of most
participating employers' pay codes was specified in exhibits to the settlement. See Attachment B.
Confidential and Privileged
Board of Retirement
October 21, 2009
Page 5
ReedSmith
The CCCERA Policy and the Paulson settlement allow for the inclusion of amounts paid at termination
to the extent those amounts were earned (but not necessarily payable) during the final compensation
period. This treatment became inconsistent with the later rulings in In Re Retirement and Salus
(discussed above), because under those rulings no terminal pay should be included in final compensation
unless it was both (a) earned and (b) payable ( "cashable ") during employment.
Anticipating later legal developments, however, the Paulson settlement expressly states: "All Parties
agree that any subsequent determinations by a court of competent jurisdiction that enlarge, define,
narrow, or in any other way relate to the scope of the decision of the [Ventura.case] or the. items of
compensation to be included for benefit purposes under [CERL] shall have no effect on this Settlement
or its terms." Thus, the parties to Paulson (including CCCERA) agreed that, even if a court later ruled
that all termination cash outs should be excluded from final compensation, that ruling would not impact
the class members' rights under the settlement to have termination cash outs included if the cashed -out
time was earned during the final compensation period.
The Paulson litigation was brought by retired CCCERA members, to increase their retirement benefits.
The Settlement Agreement by its terms only applied to those already retired as of September 30, 1997.
Active employees were also threatening suit at the time, and their counterparts had already filed similar
litigation in other CERL counties. For that reason, the CCCERA Board determined that it would
voluntarily apply the same terms to all members, regardless of active, retired or deferred status. As a
matter of law, however, the Paulson settlement is not binding as to any member who retired after
September 30, 1997, and the Board is. not bound by the.Paulson settlement as to any such members or
their beneficiaries.
ANALYSIS
Final Compensation, Properly Includes More Than Just Base Salary.
Before addressing the areas of concern, it is important to note that, under the binding Ventura precedent,
more than just base salary is properly included in a member's final compensation. For example, items
like "management incentive pay" (additional cash payments for managers), "vehicle allowance" (cash
payments to employees who use their own cars for work purposes) and "stand -by pay" (cash payments
in recognition of members' availability after normal working hours) are properly included in the
calculation of a member's final compensation under both CERL and the Paulson settlement. These
inclusions do not constitute improper "spiking" of benefits, as has been contended in the media. Under
law, the CCCERA Board must include these items in members' final compensation for the purpose of
calculating their retirement allowances. It has no discretion to do otherwise.
I
Confidential and Privileged
Board of Retirement
October 21, 2009
Page 6
Areas of Concern
"Straddling"
ReedSmith
The timing of a member's cash out of accrued vacation or leave can sometimes be structured so that two
cash outs earned in two different fiscal years will fall within a single 365 day final compensation period.
Many employers only permit one cash out per fiscal year, but even with that restriction, it may be
possible for a member to choose a final compensation period that "straddles" two fiscal years' worth of .
cash outs. Although both cash outs are paid during the member's chosen final compensation period,•
they are not both fully earned during the final compensation period. Accordingly, at least one of thei
cash outs should be excluded from the member's final compensation (and no time should be included if
it was earned before the.mernbcr.'s final compensation year).2
Cash Out of Accrued Vacation or Leave Earned in Prior Years
CCCERA's Policy states: "The value of accrued time, such as vacation, holiday or sick leave, that is
sold back to the employer by the employee each year under a `cash -out' agreement, is includable in
compensation eamable. ". The exhibits to the Paulson settlement also state that annual vacation cash out
is pensionable. While this statement in the Policy is generally consistent with the Ventura precedent, it
appears incomplete because it does not expressly require the vacation time cashed out to have been
earned in the final compensation period. Thus, some participating employers and members may be
reporting vacation cash out as pensionable compensation, when it does meet both the "earned" and
"cashable" legal requirements
It also appears that some members may have taken advantage of this Policy statement by cashing out
one year of accrued vacation in their final year of employment and then reporting to CCCERA as
pensionable compensation another year's worth of accrued vacation cash out at termination. This has
the impact of including two years' worth of vacation accrual in a single final compensation year.
Although both years of vacation` accrual were paid in _the ftnal.comperisation year, by definition only one
(at most) could have been earned in that year: Under applicable law, members should not be allowed to
include more than one year's worth of accrued vacation cash out in,their final compensation (or no more
than three years' worth of accrued vacation.cash'out if the member has a three year final compensation
period).
2 Under some circumstances, a member may be able to achieve a higher retirement allowance
through a type of "straddling" that is consistent with CERL and the Paulson settlement. This could
occur when an employee is allowed to cash out in one fiscal year less than she may have earned during
that year. For example, if a member earns 160 hours of vacation each fiscal year, but is allowed to cash
out only one -third of that time each fiscal year, the member could legitimately "straddle" two fiscal
years and cash out two- thirds of her earned and accrued 160 hours (a 107 hours). Under this scenario,
all 107 hours of vacation cashed out would have been both earned and paid (or payable) during the final
compensation period. Thus, all 107 hours would be properly included in the member's final
compensation.
Confidential and Privileged
Board of Retirement
October 21, 2009
Page 7
Cash Outs Upon Termination
ReedSmith
As explained above, CCCERA has historically applied the terms of the Paulson settlement to all of its
members even though the settlement is only binding with respect to members who were retired on or
before September 30, 1997. Under the Paulson settlement, cash outs at termination are includable in
final compensation to the extent the time cashed out was earned during the final compensation period.
This aspect of the Paulson settlement would be inconsistent with In Re Retirement and Salus if members
Were able to include more cash outs in their final compensation than they could have converted from
time to cash in during the final compensation year of their employment.
While the Paulson settlement bound the Retirement Board to this practice with respect to members who
retired on or before September 30, 1997, it did not bind the Board with respeci to members who have
retired after that date. Thus, for members retiring after September 30, 1997, case law indicates that cash
outs payable only at termination ought not be included in final compensation.
EXAMPLE
To better illustrate how these (sometimes overlapping) issues play out, below is an example of a
member whose $283,958 annual retirement allowance was recently highlighted in the Contra Costa
Times.
In addition to a $222,507 base salary, the employer reported to CCCERA the following compensation as
having been paid to the member in his f nal compensation year:
• $4,906 -- "management pay"
• $11,074 -- "stand -by pay"
• $8,400 -- "auto allowance"
• $18,810 - 160 hours of administrative leave cashed out in his final compensation year
• $18,838 -- 160 hours of vacation time cashed out in his final compensation year
• $28,121 -- 240 hours of vacation time cashed out at termination
In this example, the first three items were properly included in the member's final compensation under
case law and the Paulson settlement. The problems appear in the amounts of cashed out administrative
leave and vacation time the member had included in his pensionable compensation.
Regarding the administrative leave, it is our understanding that this member earned 80 hours of
administrative leave per year and could cash out up to the same amount each year during employment.
During his final year, however, he was permitted to receive (and submitted to CCCERA as additional
Confidential and Privileged
Board of Retirement
October 21, 2009
Page 8
ReedSmith
"final compensation ") the cash value of 160 hours' worth of administrative leave (by "straddling" two
fiscal years with his final compensation year.) This means that he had 80 hours of leave cash out
included in his final compensation that at a minimum was not earned during his final compensation year.
Thus, half of the administrative leave figure may have been improperly included in his final
compensation, resulting in excess final compensation of S9,405.
Regarding the vacation cash outs, it is our understanding that this member earned 240 hours of vacation
per year, but he was only allowed to cash out a maximum of 80 hours each year. He was also permitted
to cash out at least 514 hours of accrued vacation at the time of his termination. By engaging in "lawful
straddling". (see footnote 2 above) this member would, have been. able cash out up to 160 hours of
accrued vacation that would have been both earned and paid (or payable) in cash during his final
compensation period. That amount is properly included in his final compensation. However, the
addition 240 hours above and beyond that amount was not permitted to be included. Including this
overage resulted in excess final compensation of $28,121.
In the above example, the member's final compensation appears to have been overstated by at least
$37,526. With 30.27 years of service credit, his annual retirement benefit may be overstated by
approximately $34,000 per year, plus compounding COLA increases on that amount, for the rest of his
life (presumably another 20 to 30 years). Thus, we can see how just one example of what the press
labels "pension spiking" (albeit an extreme case) could result in a benefit cost approaching a million
dollars over time.
CONCLUSION AND RECOMMENDATIONS
Many items of remuneration that members are paid in addition to their base salaries are properly
included in calculating their final compensation. This is not "spiking." The word "spiking" should be
reserved for the purposeful manipulation of a member's final compensation in order to increase a
retirement allowance beyond what the law allows.
It appears that CCCERA's .Policy and inconsistencies in the reporting systems between CCCERA and
some of its participating employers may be enabling an overstatement of pensionable compensation by
some members of the system. It would be prudent now to consider appropriate adjustments to
CCCERA's policies and practices in order to avoid potentially substantial future unfunded costs to the
system, its participating employers, and ultimately, the county's taxpayers.
We recommend that the Board proceed as follows:
1. Research and evaluate selected employer pay and reporting practices to determine whether and to
what extent the overstatement of final compensation may be occurring in the retirement system.
2. Determine whether and to what extent employer and employee contributions have been collected on
elements of compensation that are not properly includable in final compensation.
3. Determine what changes in CCCERA's policies and practices, if any, would be appropriate in order
to bring the system into compliance with currently applicable law.
Confidential and Privileged
Board of Retirement
October 21, 2009
Page 9
ReedSmith
4. Determine whether and to what extent it is appropriate to take corrective measures as to current and
future retired, active and deferred members of the system, including recalculation of benefits, arrears
contributions and other actions.
5. Determine whether recent improvements in the reporting and processing of retirement benefit
calculations will improve the delivery of the proper level of benefits to the members of the system.
We will be pleased to address these issues with the Board at its upcoming meetings.
Resp ctfully,
H y L. eiderman
c: Marilyn Lecdom, CEO
Karen Levy, Counsel
Agenda Item 6.a.4)
Board Meeting of December 3, 2009
Written Announcements:
District Events /Training
a) Household Hazardous Waste Collection Facility (HHWCF)
Annual Report Presentation to Mountain View Sanitary
District
District staff will present a summary of the 2008 -09 HHWCF Annual
Report to the Mountain View Sanitary District (MVSD) Board of Directors
on Thursday, December 10, 2009 at 6:30 p.m. Staff will go to MVSD
offices located at 3800 Arthur Road in Martinez. If District Board Members
wish to attend, inform Secretary of the District Elaine Boehme.
b) Managers to Attend California Specialized Training
Institute
General Manager Jim Kelly, Director of Administration Randy Musgraves,
Plant Operations Division Manager Randy Grieb, and Maintenance
Supervisor Dante Marchetti will attend Earthquake: An Introduction to
Emergency Management training from Monday, December 7 through
Thursday, December 10, 2009 at the Crown Plaza Hotel in Concord.
Another group of Managers will attend in January 2010. An informational
flyer is attached.
Project Updates
c) Television Inspection of Sanitary Sewers, D.P. 036545ENG
The Capital Projects Division utilizes television inspection to determine the
condition of the existing pipe, location of laterals, and verify record
information. The results are used to evaluate alternatives during design
and to minimize change orders during construction.
This project will be advertised on December 9 and 15, 2009. Bids will be
opened on January 14, 2010. The cost is currently estimated at $150,000
for three -year period. More information will be presented when the Board
is asked to approve the contract on February 4, 2010.
General Updates
d) Status of Green Street Sewer Easement Acquisition
On November 5, 2009, staff reported to the Board of Directors about the
easement acquisition process along Green Street for the Martinez Sewer
Renovation Project, Phase 3. Staff informed the Board of the plan for
acquiring easements by early 2010, including the process and schedule
for condemnation.
Last week, staff prepared easement offer packages and personally met
with the property owners. As of November 21, 2009, staff has acquired all
permanent sewer easements across nine properties and sufficient
temporary construction easements to allow replacement of the existing
sewer during the 2010 construction season. As a result of the successful
negotiations, condemnation proceedings will not be required. Staff who
worked on the preparation of easement offers and negotiations include: .
Severina Camorongan, Engineering Assistant III
Stephanie Gronlund, Associate Engineer
Nancy Molina, Associate Engineer
Molly Mullin, Senior Right of Way Agent
Nancy Parker, Administrative Assistant
Kathleen West, Senior Right of Way Agent
e) Results of Annual Environmental Protection Agency
Treatment Plant Inspection
On September 17, 2009, the United States Environmental Protection
Agency ( USEPA)/ Regional Water Quality Control Board conducted an
annual compliance and evaluation inspection of the treatment plant. Craig
Blett, an employee of PG Environmental, LLC, which is a USEPA
contractor, conducted the inspection. The District received the written
inspection report dated November 5, 2009, with an overall rating of
satisfactory. No major findings were identified in the inspection. The
report noted that the facility appears to be well operated and maintained.
The twenty page report is available upon request.
b
•„�
`� Contra Costa County Office of the Sheriff
And CALEMA California Specialized Training
r�
Institute (CSTI)
Earthquake: An Introduction to Emergency
Management in California
Date: December 7 —10, 2009 4 -day /32 -hr. Course
Location: Crown Plaza Hotel, Concord POST - Certified, Plan II
CSTI's Earthquake course is a core course in emergency management training. This
training program introduces participants to key emergency management principles and
practices using a complex earthquake disaster. Participants will be involved in a progressive
series of exercises culminating in a realistic earthquake simulation as a member of an
emergency management team.
We are delivering this course in Contra Costa County, to build a strong emergency
management presence throughout the county. Only two applicants will be allowed from
each agency. Space is extremely limited and a wait list will be created. This course is
appropriate for your Chief .Executive Officer, department heads, operations officers,
emergency planners, and others with essential emergency management responsibilities.
Instruction emphasizes the importance of a comprehensive set of strategies including initial
disaster response, options to mitigate the impact of disasters before they happen and to
strengthen preparations for prompt, effective restoration during recovery.
All components of this course comply with the Standard Emergency Management System
and National Incident Management System (SEMS / NIMS).
Key topics covered are:
• Seismological and Geological
Considerations
• First Responder Issues
• Action Planning
• Behavioral Considerations
• Information Technologies for
Earthquakes
• Mutual Aid
• Disaster Automation
• Emergency Public Information
• EOC Organization and Functions
• Emergency Management Exercising
• Damage Assessment
• Volunteer Services
Location: Classroom instruction will occur at two locations, the Crown Plaza Hotel in Concord
and the County's Emergency Operations Center in Martinez.
Course Cost / Enrollment: Tuition free. Paid for through FY08 State Homeland Security
Grant ($650 value). The class enrollment is limited to 60 students, so we are accepting only
2- participants from each agency.
Registration: To register, complete the information below and return it to Rick Kovar,
County OES Planner at: rkova(a)so.cccountv.us or by FAX to: 925 - 646 -1120. Registration
due by: November 23, 2009.
Agenda Item 6.a.4)
Board Meetinq of December 3, 2009
Additional Written Announcements:
District Financial Items
f) Series A and B Bond
Series A taxable Build America Bonds in the amount of $19,268,522.95
closed the morning of November 12, 2009. These bonds have a direct
35% subsidy from the Federal government with yields ranging from 3.45%
to 3.78% net of the subsidy.
Series B tax exempt bonds in the amount of $36,538,264.10 closed this
morning on schedule. Series B will refund the 1998 and 2002 issues as
well as raise $12.7 million in new proceeds with yields ranging from .4% to
3.79 %.
The combination of Series A and B proceeds will produce $30 million for
the Construction Fund.
District Events/Training
g) Delta Discovery Donor Appreciation Voyage Reminder
A Delta Discovery Donor Appreciation Voyage aboard the SS Brownlee is
being planned for the program's major sponsors on Saturday, February 13
and Saturday, February 20, 2009. Both voyages will take place from
1 p.m. to 3 p.m. If you would like to attend one of the voyages, contact
Communication Manager Michael Scahill as soon as possible. Family
members and children are welcome.
.>
A
Central Contra Costa Sanitary District
Board Meeting
December 3, 2009
Board Member McGill
Item 6.d.1)
FUTURE MEETINGS AND CONFERENCES WITH PAID
EXPENSES AND /OR STIPEND
Mayors' Conference in Lafayette, CA
December 3, 2009
MEETINGS AND CONFERENCES THAT EXPENSES
AND /OR STIPEND WAS PAID
Attended Contra Costa Council Luncheon with Sate Senator
Mark DeSaulnier
November 20, 2009
:J
Item 6.d.2 Announcements
Attended:
Concord Chamber Mixer
November 19, 2009
Grand Opening, Michael Chavez Center
Concord
November 19, 2009
Contra Costa Council Board Meeting
November 20, 2009
Private meeting with State Controller John Chiang
November 20, 2009
Industrial Association of Contra Costa County Lunch with
Greg Gartrell, CCWD
December 2, 2009
HBANC Breakfast Meeting
December 3, 2009
Will-attend:
John F. Kennedy University Advisory Committee
Meeting
December 4, 2009
Concord Chamber of Commerce
Green Business Committee
December 8, 2009
Contra Costa Council Land Use Task Force Meeting
December 9, 2009
County Supervisor Uilkema' s Breakfast
December 10, 2009
Industrial Safety Committee Meeting
December 10, 2009
Concord Chamber of Commerce Mixer
December 10, 2009
Pleasant Hill Chamber of Commerce Holiday Mixer
December 16, 2009